Shanghai Textile Group: In The Direction Of Marketization

< p > 2010 Shanghai < a target= "_blank" href= "http://www.91se91.com/" > textile < /a > the group got rid of the low financial crisis, operating income reached 36 billion 350 million yuan, the growth rate was as high as 56%.

In 2012, Shanghai Textile Group maintained a rapid growth trend, with a revenue of 44 billion yuan, of which trade revenue accounted for more than 80%.

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< p > how to maintain business stability under the sharp fluctuation of foreign trade environment is especially important for the textile trade group dominated by trade.

In the future, pformation and innovation is still the key word for development of < a href= "http://www.91se91.com/news/ > > textile group < /a >. In the process of pformation, the financial management mode of Textile Group has also changed significantly.

Recently, "Shanghai state capital" interviewed Liu Ping, chief financial officer of Shanghai textile (Group) Limited company and deputy director Wang Guo Ming, and discussed the financial management problems in pformation.

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< p > Transformation: < /p >

< p > "state owned capital of Shanghai": what is the focus of the current textile group's financial work? < /p >

< p > Liu Ping: in conjunction with the pformation goal of financial work, in recent years, we have been working on the three major financial platforms of the group, one is the accounting platform, the main is accounting, statements, budget and analysis; the second is the financial platform with capital settlement as the main content, through the cooperation with banks, to speed up the internal financial integration and improve the efficiency of the group's capital allocation; the third is the tax platform, focusing on the statistical analysis and planning management of the tax.

The construction of the three platforms is not only a requirement to perfect the financial system and realize the financial pformation, but also an internal need to support the group's pformation and development strategy.

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< p > Shanghai state owned Assets: the global economic slowdown has been affected by the financial crisis in the past two years. However, the textile group suffered a certain impact in 2009, and it increased rapidly in 2010 and 2011. Why? < /p >

< p > Liu Ping: mainly because the group has completed the scale adjustment task before the financial crisis, and initially realized the pformation of group business and management structure.

Transformational development has been a highlight of our group's work over the past few years, and financial changes are only one aspect of the pformation of the whole group.

The textile group completed business adjustment and strategic deployment from 2004 to 2007. The new organizational structure and management mode were re established. The future direction of development of the group and various business sectors also had a clear positioning. However, when the internal integration ended, we encountered a financial crisis, and the group's performance was greatly affected in 2009.

With the introduction of a series of positive response policies, the whole industry is gradually warming up. At the same time, we have also seized some opportunities and improved the level of operation.

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< p > "state owned capital of Shanghai": what are these opportunities specifically? < /p >

< p > Liu Ping: for example, the acquisition and merger and timely introduction of some new businesses, in 2010, the Shanghai real estate group pferred the real China World Trade Center construction system to the textile group. In the next two years, the contribution rate of China World Trade Center's < a href= "http://www.91se91.com/news/index_c.asp" > textile > /a > the trade mode growth of the group reached nearly 50%.

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< p > Shanghai state owned Assets: has there been any change in the financial management mode of the textile group during the rapid development of the two years? < /p >

< p > Liu Ping: whether in the way of operation or in the way of financial management, we are changing towards the direction of marketization. This pformation is subordinated to the overall strategic requirements of the group and is centered around risk control, quality of economic operation and financing.

Marketization is mainly reflected in the operation mode of integration. The textile group is pformed by the textile industry bureau. The original group headquarters and subordinate enterprises have two skins. The internal integration has been more and more obvious since 2004. The headquarters has paid more attention to the construction of the platform, providing capital funds and service support for various business sectors. After repositioning the headquarters functions, we have optimized the allocation of internal resources again, and the profile and structure of the group are more clear.

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< p > internal control < /p >

< p > "Shanghai state owned": the import and export of textile group is very large, and the foreign trade market is changing rapidly. How does the group conduct risk management and control? How to avoid trade risk? < /p >

< p > Liu Ping: Textile Group's < a href= "http://www.91se91.com" > foreign trade import and export < /a > volume is indeed very large, and the proportion of agency occupies a relatively high proportion. With the active foreign trade pactions, the trading risk of foreign trade must be fully valued.

For trading companies, there are many market pitfalls. For example, very few customers may use trade agents to obtain funds or defraud tax rebates. We have encountered some examples.

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< p > in order to prevent and control risks, the group adopts a variety of measures to monitor the trade data and analyze financial data on the one hand. On the other hand, it co operates with China Export and Credit Insurance Corp to require new customers and new businesses to go through the credit investigation of China's credit insurance company, and to insure as much as possible, and the old customers gradually increase the proportion of insurance coverage. At present, the insurance rate of export business is close to 40%.

50% of the premiums are supported by headquarters, and 30% are subsidized by the city, and 20% are borne by the enterprises themselves.

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< p > Wang Guoming: apart from that, we will hold an analysis meeting every month, summarizing the internal and external environment and policy changes, and combining ERP system to analyze the foreign trade situation.

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P > "national capital of Shanghai": what do textile groups do in terms of exchange rate risk and capital risk? < /p >

< p > Liu Ping: in this regard, we mainly cooperate with banks.

Because of the large scale of foreign trade, the fluctuation of commodity prices is also large. In the case of unilateral appreciation of the renminbi, we can still use financial derivatives to achieve exchange earnings, but now that the two-way fluctuation of the renminbi has become smaller and smaller.

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< p > differentiated capital management < /p >

< p > Shanghai state capital: what kind of capital management method does the textile group take under the jurisdiction of hundreds of companies? What is the effect? < /p >

< p > Liu Ping: we have close to 200 accounting reports, of which more than 40 belong to two listed companies. These two listed companies are relatively independent in management and operation. The headquarters are more restricted in strategic guidance and assessment. Business activities are autonomous decisions. In the other 160 subsidiaries, the number of two companies directly managed by the group is around 30. We adopt a hierarchical management approach and focus on two companies.

Capital management is also mainly financing with the subordinate two level companies, and the funds of the three companies are basically centralized to the two level companies.

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< p > our main business units are directly facing the target market, and the upstream and downstream integration is not obvious, and the scale and form are quite different. Therefore, we adopt differential management in fund management.

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< p > "state owned capital of Shanghai": what is differential management? < /p >

< p > Liu Ping: for those enterprises directly engaged in the operation of products (commodities) and having strong liquidity needs, the group does not implement the centralized management of funds, and funds are dispatcher by the enterprises themselves. When the funds are in short supply, the group will support, and when the enterprise capital is surplus, it will be returned again. For the enterprises which mainly rely on the service industry and need less liquidity, the group will ask them to collect funds to the headquarters cash pool. The proportion of the last year's collection is 50%, and this year increased to 70%, this index is included in the assessment requirements.

The advantage of this is that it can carry out targeted management and fully mobilize the enthusiasm of the subsidiary company on the basis of improving the overall efficiency of fund allocation.

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< p > "Shanghai state capital": how to use the sum of money? < /p >

< p > Liu Ping: the purpose of the group's centralized fund management is to increase revenue and reduce expenditure, and to get better capital gains and support for the subsidiary companies.

Enterprises collect funds into the pool of funds of the group, and we give them a higher percentage of interest rate than the bank deposit rate under the same conditions. When the enterprises are financing the group, the interest rate will be given a discount according to the benchmark lending rate of the bank, and the benefit of the internalization of interest will be obvious.

In recent years, our new capital needs can basically be solved through internal capital channels.

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< p > "Shanghai state capital": in this way, the group's capital operation capability is higher. Is this part of the fund invested? < /p >

< p > Liu Ping: this part of the fund must first guarantee the group's liquidity safety, followed by ensuring the capital needs of each business unit, and the surplus funds will cooperate with the bank to manage assets and get financial returns.

The cash pool is not allowed to make fixed investment to ensure liquidity and security. Therefore, the target revenue of this part of our funds is relatively low, basically around 5%, and never venture into any risky investment.

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< p > "state owned capital of Shanghai": what experience can the group share in the field of financial information? < /p >

< p > Wang Guoming: the information construction group has been doing this for 5 years. We are working with Kingdee [micro-blog] company to personalize the system settings on the basis of this software.

The system has five major functions: accounting, reporting, budgeting, capital and financial decision support system.

These four modules have been cleared up in the past years, and the last major function can be achieved initially this year.

The implementation process of information technology is rather difficult. There are many enterprises under our company. The information situation of each enterprise is uneven. The unified platform should eliminate all the original system.

Overall, the effect is very significant.

The biggest advantage of informatization is the openness and pparency of information. The group can check the accounting data of subordinate companies at any time. Every a href= "http://www.91se91.com" > Enterprise < /a > is in a clear state, which is more conducive to group decision making.

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